Romesh opened a fixed deposits account in his bank for 3 years by depositing ₹80,000.The bank has promised to pay him compound interest annually at the rate of 7% per annum. What is the maturity value of his FDR? (Nearest to a ₹)
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. ₹98,003
Formula used:
A = P(1 + R/100)T
Where, P = principal, A = amount, R = rate and T = time
Calculations:
Using the above formula;
⇒ A = 80000(1 + 7/100)3
⇒ A = 80000 × 1.07 × 1.07 × 1.07
⇒ 98003